Modern Shares And Stockbrokers

Modern Shares is in the business of primarily providing brokerage services.

It owned about 13cr of net liquid assets as at 30^th September, 2011.

The company has reported erratic profitability on somewhat stable revenues over the last five years – reporting about 40lacs of operating profits on about 3cr of revenues in the last twelve months.

The business is exposed to all the risks of the brokerage business including exposure to the stock market cycle with low retail demand in down years, intense competition, heavy regulations, etc.

Moreover, management have paid very low dividends relative to liquid assets and minority shareholders ought to press for larger payouts if there doesn’t appear to be any prospect for profitable (and imminent) reinvestment of funds.

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On The Radar: India's Small-Cap Equities (Concluded)

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Investing Reflections On India

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